SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
Attunity Ltd.
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(Name of Issuer)
Ordinary Shares, nominal value NIS 0.1 per share
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(Title of class of securities)
M15332105
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(CUSIP Number)
Henry I. Rothman, Esq.
Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
212-704-6000
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(Persons Authorized to Receive Notices and Communications)
December 30, 2003
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ]
Note. Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. M15332105 13D Page 2 of 9 Pages
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Shimon Alon
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds:
PF
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization
Israel
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Number of 7. Sole Voting Power 0
Shares Bene- ------------------------------------------------------
ficially Owned 8. Shared Voting Power 4,987,797 /1/
By Each ------------------------------------------------------
Reporting 9. Sole Dispositive Power 0
Person With ------------------------------------------------------
10. Shared Dispositive Power 4,987,797
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
4,987,797
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
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13. Percent of Class Represented by Amount in Row (11)
28.16%
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14. Type of Reporting Person (See Instructions)
IN
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/1/ Includes 2,043,146 Ordinary Shares, 2,208,489 Series A Warrants and 736,162
Series B Warrants.
CUSIP No. M15332105 13D Page 3 of 9 Pages
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Ronald Zuckerman
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds:
PF
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization
Israel
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Number of 7. Sole Voting Power 0
Shares Bene- ------------------------------------------------------
ficially Owned 8. Shared Voting Power 4,987,797 /2/
By Each ------------------------------------------------------
Reporting 9. Sole Dispositive Power 0
Person With ------------------------------------------------------
10. Shared Dispositive Power 4,987,797
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
4,987,797
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
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13. Percent of Class Represented by Amount in Row (11)
28.16%
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14. Type of Reporting Person (See Instructions)
IN
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/2/ Includes 2,043,146 Ordinary Shares, 2,208,489 Series A Warrants and 736,162
Series B Warrants.
CUSIP No. M15332105 13D Page 4 of 9 Pages
ITEM 1. SECURITY AND ISSUER
This Schedule relates to the Ordinary Shares, nominal value NIS 0.1 per
share (the "Ordinary Shares") and Warrants of Attunity Ltd. (the "Issuer"). The
Issuer's principal executive offices are located at Einstein Building, Tirat
Carmel, Haifa, 39101, Israel.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(c) and (f): This Schedule is filed by Shimon Alon, an individual
who is an Israeli citizen and Ronald Zuckerman, an individual who is an Israeli
citizen. Shimon Alon and Ronald Zuckerman are collectively referred to in this
Schedule as the "Reporting Persons."
The mailing address of Shimon Alon is 55 Rawson Rd., Brookline, MA
02445. The present principal occupation of Shimon Alon is Executive Vice
President of VERITAS Software Corporation.
The mailing address of Ronald Zuckerman is 9B Hahoresh St., Kfar
Shmaryahu, Israel. The present principal occupation of Ronald Zuckerman is
managing partner of an Israeli venture capital fund named Magnum Communication
Fund.
(d) and (e): During the past five years, neither of the Reporting
Persons (i) have been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) have been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or finding any violation with
respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Each Reporting Person utilized available cash assets from its personal
funds to purchase 408,629 Ordinary Shares, 441,698 Series A Warrants (the
"Series A Warrants") and 147,232 Series B Warrants (the "Series B Warrants," and
collectively with the Ordinary Shares and the Series A Warrants, the
"Securities") for a purchase price of $633,375.26 for each Reporting Person.
Pursuant to the terms of that certain Attunity Ltd. Stockholders
Agreement dated December 23, 2003 (the "Stockholders Agreement"), as more fully
described below, the Reporting Persons were granted sole discretionary authority
over the voting and disposition of the Securities which were purchased by, or
assigned to, the following persons and entities pursuant to that certain
Purchase Agreement dated December 23, 2003 (the "Purchase Agreement"), as more
fully described below. Therefore, the Reporting Persons are also deemed to be
the beneficial owners of the Securities held by the following persons and
entities:
o Sharon Kotlicki-Perry utilized available cash assets from her
personal funds to purchase 204,315 Ordinary Shares, 220,849
Series A Warrants and 73,616 Series B Warrants for a purchase
price of $316,687.63.
CUSIP No. M15332105 13D Page 5 of 9 Pages
o Avishai Kotlicki utilized available cash assets from her
personal funds to purchase 102,157 Ordinary Shares, 110,425
Series A Warrants and 36,808 Series B Warrants for a purchase
price of $158,343.815.
o Genia Kotlicki utilized available cash assets from her
personal funds to purchase 102,157 Ordinary Shares, 110,424
Series A Warrants and 36,808 Series B Warrants for a purchase
price of $158,343.815.
o GF Capital Management & Advisors LLC utilized available cash
assets from its working capital to purchase 245,178 Ordinary
Shares, 265,018 Series A Warrants and 88,341 Series B Warrants
for a purchase price of $380,025.16.
o Peter Luggen utilized available cash assets from his personal
funds to purchase 163,452 Ordinary Shares, 176,679 Series A
Warrants and 58,893 Series B Warrants for a purchase price of
$253,350.10.
o Barossa Finance Ltd. utilized available cash assets from its
working capital to purchase 408,629 Ordinary Shares, 441,698
Series A Warrants and 147,232 Series B Warrants for a purchase
price of $633,375.26.
ITEM 4. PURPOSE OF TRANSACTION
Pursuant to the Purchase Agreement by and among Special Situations Fund
III, L.P., Special Situations Cayman Fund, L.P., Special Situations Technology
Fund, L.P., Special Situations Technology Fund II, L.P. and Special Situations
Private Equity Fund, L.P. (collectively, the "Sellers") and the Reporting
Persons, on behalf of themselves, and GF Capital Management & Advisors LLC, Eli
Perry, Peter Luggen and Barossa Finance Ltd. (the "Purchasers")/3/, the Sellers
sold to the Reporting Persons and the Purchasers an aggregate of (i) 2,043,146
Ordinary Shares of the Issuer, (ii) Series A Warrants of the Issuer to purchase
an aggregate of 2,208,489 Ordinary Shares at an exercise price of $1.75, and
(iii) Series B Warrants of the Issuer to purchase an aggregate of 736,162
Ordinary Shares at an exercise price of $2.25 for an aggregate purchase price of
$3,166,876.30. The transactions contemplated by the Purchase Agreement closed on
December 30, 2003.
Pursuant to the terms of the Purchase Agreement, the Reporting Persons
had the power to execute and deliver the Purchase Agreement on behalf of all the
Purchasers.
Pursuant to the terms of the Stockholders Agreement among the Reporting
Persons and the Purchasers, the Reporting Persons have dispositive power over
the acquisition, disposition and/or exercise of the Securities acquired pursuant
to the Purchase Agreement. Further, the Reporting Persons were granted sole and
discretionary power to exercise the voting rights of each of the Securities
acquired pursuant to the Purchase Agreement.
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/3/ Subsequent to the signing of the Purchase Agreement on December 23,
2003 and prior to the closing of the transaction on December 30, 2003,
Eli Perry assigned his interest in the Securities pursuant to the
Purchase Agreement as follows: 50% of his interest to Sharon
Kotlicki-Perry, 25% of his interest to Avishai Kotlicki and 25% of his
interest to Genia Kotlicki. For purposes of this Schedule 13D, Sharon
Kotlicki-Perry, Avishai Kotlicki and Genia Kotlicki will be deemed to
be included in the definition of Purchasers.
CUSIP No. M15332105 13D Page 6 of 9 Pages
Pursuant to the terms of the Stockholders Agreement, the Securities
acquired pursuant to the Purchase Agreement shall be voted, among other things,
to elect the Reporting Persons to the Board of Directors of the Issuer. The
Stockholders Agreement shall remain in force for a period of three (3) years
from the date of the Agreement.
Pursuant to a Term Sheet dated December 29, 2003 between the Issuer and
the Reporting Persons (the "Term Sheet"), the Reporting Persons and other
individuals were granted an option exercisable within thirty (30) days from the
date of the Term Sheet to purchase $2,000,000.00 of convertible debentures from
the Issuer and the Reporting Persons, solely, were granted an option exercisable
within thirty (30) days from the date of the Term Sheet to acquire three-year
warrants to purchase 450,000 Ordinary Shares of the Issuer at a price per share
of $1.75 (the option to purchase the convertible debentures and the option to
acquire three year warrants to be collectively, the "Purchase"). The Purchase
can only be exercised in full and not in part.
Pursuant to the Term Sheet, after the Purchase, the Reporting Persons
and other individuals will be entitled to appoint two Board members of the
Issuer as long as the Reporting Persons and other individuals hold at least
fifteen percent (15%) of the outstanding share capital of the Issuer and one
Board member as long as the Reporting Persons and other individuals hold at
least five percent (5%) but less than fifteen percent (15%) of the outstanding
share capital of the Issuer subject to certain additional parameters as more
fully described in the Term Sheet. The Issuer agrees that the Reporting Persons,
along with another individual, will be appointed as Board members to the Board
of Directors of the Issuer upon closing of the debenture transaction and will
serve as directors until the Issuer's 2004 annual general meeting of
shareholders.
Except as may be provided herein, in the Purchase Agreement, in the
Stockholders Agreement, or in the Term Sheet, the Reporting Persons do not
presently have any other plans or proposals which would result in: (i) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation of the Issuer or any of its subsidiaries; (ii) a sale or transfer of
a material amount of assets of the Issuer or any of its subsidiaries; (iii) any
change in the present Board of Directors or management of the Issuer, including
any plans or proposals to change the number or term of directors or to fill any
existing vacancies on the Board; (iv) any material change in the present
capitalization or dividend policy of the Issuer; (v) any other material change
in the Issuer's business or corporate structure, (vi) any changes in the
Issuer's charter, by-laws or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Issuer by any person; (vii)
causing a class of securities of the Issuer to be delisted from a national
securities exchange or cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association; (viii) causing
a class of equity securities of the Issuer to become eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934; or (ix) any action similar to any of those enumerated above.
However, due to changing circumstances, the Reporting Persons may in
the future elect otherwise and reserve their right to effectuate any and all
changes which they deem in furtherance of the best interests of the Issuer.
CUSIP No. M15332105 13D Page 7 of 9 Pages
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) (1) Shimon Alon beneficially owns 2,043,146 Ordinary Shares, Series
A Warrants to purchase an aggregate of 2,208,489 Ordinary Shares and Series B
Warrants to purchase an aggregate of 736,162 Ordinary Shares. Assuming the full
exercise of the Series A Warrants and the Series B Warrants, Shimon Alon would
beneficially own 4,987,797 Ordinary Shares which would constitute 28.16% of the
issued and outstanding Ordinary Shares of the Issuer.
(2) Ronald Zuckerman beneficially owns 2,043,146 Ordinary Shares,
Series A Warrants to purchase an aggregate of 2,208,489 Ordinary Shares and
Series B Warrants to purchase an aggregate of 736,162 Ordinary Shares. Assuming
the full exercise of the Series A Warrants and the Series B Warrants, Ronald
Zuckerman would beneficially own 4,987,797 Ordinary Shares which would
constitute 28.16% of the issued and outstanding Ordinary Shares of the Issuer.
As stated above, pursuant to the terms of the Stockholders Agreement,
the Reporting Persons were given sole discretionary authority over the voting
and disposition of the Securities purchased pursuant to the Purchase Agreement
and therefore the Reporting Persons are deemed to be the beneficial owners of
such Securities. The individual stock ownership for each Reporting Person and
Purchaser is illustrated below:
o Shimon Alon purchased 408,629 Ordinary Shares, 441,698 Series
A Warrants and 147,232 Series B Warrants which would
constitute 5.63% of the issued and outstanding Ordinary Shares
of the Issuer.
o Ronald Zuckerman purchased 408,629 Ordinary Shares, 441,698
Series A Warrants and 147,232 Series B Warrants which would
constitute 5.63% of the issued and outstanding Ordinary Shares
of the Issuer.
o Sharon Kotlicki-Perry purchased 204,315 Ordinary Shares,
220,849 Series A Warrants and 73,616 Series B Warrants which
would constitute 2.82% of the issued and outstanding Ordinary
Shares of the Issuer.
o Avishai Kotlicki purchased 102,157 Ordinary Shares, 110,425
Series A Warrants and 36,808 Series B Warrants which would
constitute 1.41% of the issued and outstanding Ordinary Shares
of the Issuer.
o Genia Kotlicki purchased 102,157 Ordinary Shares, 110,424
Series A Warrants and 36,808 Series B Warrants which would
constitute 1.41% of the issued and outstanding Ordinary Shares
of the Issuer.
o GF Capital Management & Advisors LLC purchased 245,178
Ordinary Shares, 265,018 Series A Warrants and 88,341 Series B
Warrants which would constitute 3.38% of the issued and
outstanding Ordinary Shares of the Issuer.
o Peter Luggen purchased 163,452 Ordinary Shares, 176,679 Series
A Warrants and 58,893 Series B Warrants which would constitute
2.25% of the issued and outstanding Ordinary Shares of the
Issuer.
CUSIP No. M15332105 13D Page 8 of 9 Pages
o Barossa Finance Ltd. purchased 408,629 Ordinary Shares,
441,698 Series A Warrants and 147,232 Series B Warrants which
would constitute 5.63% of the issued and outstanding Ordinary
Shares of the Issuer.
(b) Each Reporting Person shares with the other the power to vote or
direct the vote and dispose or direct the disposition as to the Securities
beneficially owned by such Reporting Person.
(c), (d) and (e): Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
To the knowledge of the Reporting Persons on the date hereof, except to
the extent set forth herein or in the Exhibits herewith, neither the Reporting
Persons nor any of the Purchasers have any other contracts, arrangements,
understandings or relationship (legal or otherwise) with any person with respect
to Securities issued by the Issuer, including, but not limited to, transfer or
voting of any such Securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees or profits, divisions or profits or loss
or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit No. Description
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1 Joint Filing Agreement
2 Purchase Agreement dated December 23, 2003
3 Stockholders Agreement dated December 23, 2003
4 Term Sheet dated December 29, 2003
CUSIP No. M15332105 13D Page 9 of 9 Pages
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief,
the Reporting Persons certify that the information set forth in this Schedule is
true, complete and correct.
This Schedule may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall constitute one
and the same instrument.
Dated: January 9, 2004
/s/ Shimon Alon
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Shimon Alon
/s/ Ronald Zuckerman
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Ronald Zuckerman
EXHIBIT 1
JOINT FILING AGREEMENT
This Agreement is filed as an exhibit to this Schedule 13D being filed
by Shimon Alon and Ronald Zuckerman in compliance with Rule 13d-1(k) of the
Securities and Exchange Commission, which requires an agreement in writing
indicating that the Schedule 13D to which this Agreement is attached is filed on
behalf of the below-named persons, that they are each responsible for the timely
filing of the Schedule 13D and any amendments thereto and for the completeness
and accuracy of the information concerning such persons contained therein.
This Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of
the 9th day of January, 2004.
/s/ Shimon Alon
------------------------------
Shimon Alon
/s/ Ronald Zuckerman
------------------------------
Ronald Zuckerman
EXHIBIT 2
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of December 23, 2003, by and among Special
Situations Fund III, L.P., Special Situations Cayman Fund, L.P., Special
Situations Technology Fund, L.P., Special Situations Technology Fund II, L.P.
and Special Situations Private Equity Fund, L.P. (collectively, the "Sellers")
and Shimon Alon and Ron Zuckerman (the "Representatives"), on behalf of
themselves and GF Capital Management & Advisors LLC, Eli Perry, Peter Luggen and
Barossa Finance Ltd. (collectively with the Representatives, the "Purchasers").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Sellers desire to sell and transfer to the Purchasers an
aggregate of (i) 2,043,146 shares (the "Shares") of the Ordinary Shares, nominal
value NIS 0.1 per share (the "Ordinary Shares"), of Attunity Ltd. (the
"Company"), (ii) Series A Warrants (the "Series A Warrants") to purchase an
aggregate of 2,208,489 Ordinary Shares (the "Transferred Series A Warrants"),
and (iii) Series B Warrants (the "Series B Warrants") to purchase an aggregate
of 736,162 Ordinary Shares (the "Transferred Series B Warrants" and,
collectively with the Shares and the Series A Warrants, the "Securities"), and
the Purchasers desire to purchase the Securities from the Sellers all as more
specifically provided herein; and
WHEREAS, the Representatives have the power to execute and deliver this
Agreement on behalf of all the Purchasers;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SECURITIES
Section 1.1. Purchase and Sale of Securities. Upon the terms and
subject to the conditions of this Agreement and on the basis of the
representations, warranties and agreements contained herein, the Sellers shall
sell, assign, transfer, convey and deliver to the Purchasers the Securities and
the Purchasers shall purchase such Securities from the Sellers for an aggregate
cash purchase price of $3,166,876.30 (the "Purchase Price"). The Securities to
be purchased by each Purchaser and the portion of the Purchase Price to be paid
by each Purchaser is set forth below the names of the Purchasers on the
signature pages hereof. Upon consummation of the transactions contemplated
hereby, the Purchasers shall pay the Purchase Price by one or more wire
transfers of immediately available funds to an account or accounts previously
specified by the Sellers. Notwithstanding the sale of the Securities, the
Sellers shall retain all rights they may have against the Company under the
Purchase Agreement, dated October 16, 2001 (the "Purchase Agreement"), the
Registration Rights Agreement, dated October 24, 2001 (the "Registration Rights
Agreement") and the other documents related to their purchase of the Securities
from the Company (collectively, the "Transaction Documents"). Without limiting
the generality of the foregoing, the Purchasers acknowledge that the Sellers
have obtained a
judgment against the Company in respect of certain liquidated damages owed to
the Sellers pursuant to the terms of the Registration Rights Agreement (the
"Judgment"). The Purchasers acknowledge that the purchase of the Securities as
contemplated by this Agreement does not include any right, title or interest in
the Judgment, any claims the Sellers may have against the Company or any rights
of the Sellers accruing under the Registration Rights Agreement or otherwise,
except for any claims that may arise under the Registration Rights Agreement
after the Closing (as defined below) in respect of the Securities.
Section 1.2. Closing. The consummation of the transactions contemplated
by this Agreement (the "Closing") shall take place on the date hereof or as soon
thereafter as practicable at the offices of the Seller located at 153 E. 53rd
Street, 55th floor, New York, New York 10022, or at such other time and place as
the parties may agree to in writing (the date on which the Closing takes place,
the "Closing Date").
Section 1.3. Transactions to be Effected at Closing. At the Closing:
(a) The Sellers shall deliver to the Purchasers one or more
certificates representing the Shares to be purchased by them accompanied by duly
executed stock powers endorsed in blank.
(b) The Sellers shall deliver to the Company (i) one of more
Series A Warrants and Series B Warrants, together with completed forms of
assignment specifying that the Transferred Series A Warrants and Transferred
Series B Warrants are being transferred to the Purchasers in the amounts
provided above and (ii) instructions that new warrants representing the
Transferred Series A Warrants and the Transferred Series B Warrants are to be
reissued in the names of the Purchasers in the amounts provided above and any
remaining Series A Warrants and Series B Warrants are to be reissued to the
Sellers.
(c) The Sellers shall deliver to the Company, an opinion from
Sellers' counsel (a copy of which shall be provided to the Purchasers),
addressed to the Company, that the sale of the Transferred Series A Warrants and
the Transferred Series B Warrants by the Sellers to the Purchasers may be made
as contemplated by this Agreement without registration under the Securities Act
of 1933, as amended (the "Act").
(d) The Company shall have delivered to the Sellers and the
Purchasers an acknowledgment that the Securities have been transferred and an
undertaking to resissue the Transferred Series A Warrants and the Transferred
Series B Warrants in the names of the Purchasers and in the amounts provided
above and reissue any remaining Series A Warrants and Series B Warrants to the
Sellers promptly following the Closing.
(e) The Purchasers shall deliver the Purchase Price to the
Sellers in accordance with Section 1.1.
(f) Each of the parties shall execute and deliver to the other
parties hereto such other documents or instruments as any party hereto
reasonably requests to effect the transactions contemplated hereby.
Section 1.3. Termination. In the event that the Closing does
not occur on or before December 30, 2003, either the Sellers or the Purchasers
may terminate this Agreement upon written notice to the other, provided that
such failure is not the result of a breach by the party delivering such notice
of its obligations hereunder. Time shall be of the essence.
ARTICLE II
REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS
The Sellers hereby, severally and not jointly, represent and warrant to
the Purchasers as follows:
Section 2.1. Authorization. The Sellers have the limited partnership
power and authority to execute and deliver this Agreement and to perform their
obligations hereunder, all of which have been duly authorized by all requisite
limited partnership action. This Agreement has been duly authorized, executed
and delivered by the Sellers and constitutes a valid and binding obligation of
the Sellers, enforceable against the Sellers in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
Section 2.2. No Consents. Except to the extent set forth in Section
1.2, no notice to, filing with, or authorization, registration, consent or
approval of any Governmental Authority or other individual, partnership,
corporation, joint stock company, unincorporated organization or association,
trust or joint venture, or a governmental agency or political subdivision
thereof (each, a "Person") is necessary for the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby by the Sellers.
Section 2.3. Ownership of the Securities. The Sellers own the
Securities beneficially and of record, free and clear of any liens, claims or
encumbrances (collectively, "Encumbrances"), other than those created pursuant
to the terms of the Transaction Documents and those applicable only to the
Transferred Series A Warrants and the Transferred Series B Warrants arising
under applicable federal and state securities laws. Except as set forth in the
Transaction Documents, there are no agreements (i) granting any option, warrant
or right of first refusal with respect to the Securities to any Person, (ii)
restricting the right of the Sellers to sell the Securities to the Purchasers,
or (iii) restricting any other right of the Sellers with respect to the
Securities. Subject to compliance with the requirements of the Act and the
Transaction Documents, the Sellers have the absolute and unrestricted right,
power and capacity to sell, assign and transfer the Securities to the Purchasers
free and clear of any Encumbrances (except for Encumbrances created pursuant to
the Transaction Documents and those applicable only to the Transferred Series A
Warrants and the Transferred Series B Warrants arising under applicable federal
and state securities laws). Upon delivery to the Purchasers of the certificates
representing the Securities in exchange for the Purchase Price, the Purchasers
will acquire good, valid and marketable title to the Securities, free and clear
of any Encumbrances created by the Sellers.
Section 2.4. Affiliate Status. The Sellers are "affiliates" of the
Company as that term is defined in Rule 144 promulgated under the Act.
Section 2.5. Brokers. No Person is or will be entitled to a broker's,
finder's, investment banker's, financial adviser's or similar fee from the
Sellers in connection with this Agreement or any of the transactions
contemplated hereby.
Section 2.6. Absence of Claims. Except for the Judgment and the matters
giving rise thereto, the Sellers are not aware of any present claims they may
have against the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING THE PURCHASERS
The Purchasers hereby, severally and not jointly, represent and warrant
to the Sellers as follows:
Section 3.1. Authorization. Each Purchaser that is an entity has the
power and authority (corporate, limited liability company, partnership and
other) to execute and deliver this Agreement and to perform its obligations
hereunder, all of which have been duly authorized by all requisite corporate,
limited liability company or partnership action. Each Purchaser that is an
individual has the power, capacity and authority to execute and deliver this
Agreement and to perform his obligations hereunder, all of which have been duly
authorized by all requisite action. This Agreement has been duly authorized,
executed and delivered by each Purchaser and constitutes a valid and binding
agreement of such Purchaser, enforceable against such Purchaser in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
Section 3.2. Access to Information. Each Purchaser has received all
information regarding the Company that he or it deems necessary or advisable to
evaluate the risks and merits of an investment in the Securities. In addition,
each Purchaser has had an opportunity to ask questions of and receive answers
from the Sellers and representatives of the Company concerning the business of
the Company, its condition and prospects (financial and other) and the terms and
conditions of the offering of the Securities.
Section 3.3. Accredited Investor. Each Purchaser is an "Accredited
Investor" as such term is defined in Rule 501 of the rules and regulations of
the Commission promulgated under the Securities Act.
Section 3.4. Investment Decision. (a) Each Purchaser is acquiring the
Securities for his or its own account for investment only and not for or with a
view to resale or distribution in violation of the Act. No Purchaser has entered
into any contract, undertaking, agreement or arrangement with any Person to
sell, transfer or pledge to such person or anyone else the Securities in
violation of the Act and no Purchaser has any present plans or intentions to
enter into any such contract, undertaking, agreement or arrangement; provided,
however, that by making the representations herein, no Purchaser agrees to hold
the Securities for any minimum or other specific term and each Purchaser
reserves the right to dispose of the Securities at any time in accordance with
Federal and state securities laws applicable to such disposition.
(b) Each Purchaser has the financial ability to bear the economic risk
of losing his or its entire investment in the Securities, is prepared to bear
the economic risk of its investment and can afford to sustain a complete loss of
his or its investment therein.
(c) Each Purchaser has substantial experience in making investment
decisions of this type and, therefore, has such knowledge and experience in
financial and business matters that he or it is capable of evaluating the merits
and risks of an investment in the Securities.
(d) Each Purchaser understands that the Shares and the Ordinary Shares
issuable upon the exercise of the Transferred Series A Warrants and the
Transferred Series B Warrants have been registered pursuant to a registration
statement on Form F-3 (the "Registration Statement") and that the consummation
of the sale of the Securities as provided herein may require the Company to
prepare and file with the Commission a supplement to the most current prospectus
relating to the Registration Statement or to prepare and file with the
Commission a post-effective amendment to the Registration Statement which must
be declared effective by the Commission and that any offers and sales of such
shares by such Purchaser cannot occur prior to such time. Each Purchaser further
understands that the Transferred Series A Warrants and the Transferred Series B
Warrants constitute restricted securities within the meaning of Rule 144
promulgated under the Act, and that none of such warrants, or any interest
therein, may be sold except pursuant to an effective registration statement
under the Act or in a transaction exempt from registration under the Act, and
understands the meaning and effect of such restriction.
(e) Each Purchaser has considered and, to the extent he or it believed
such discussion was necessary, discussed with his or its professional legal, tax
and financial advisers the suitability of an investment in the Securities for
the Purchaser's particular tax and financial situation and each Purchaser has
determined that the Securities are a suitable investment for him or it.
Section 3.5. Brokers. No person is or will be entitled to a broker's,
finder's, investment banker's, financial adviser's or similar fee from any
Purchaser in connection with this Agreement or any of the transactions
contemplated hereby.
Section 3.6. Financial Resources. The Purchasers have presently
available to them sufficient cash resources to enable them to pay the Purchase
Price at Closing and to perform the other obligations of the Purchasers
hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING OF THE REPRESENTATIVES
Section 4.1. Authority and Power. Each Representative has been
appointed by each of the Purchasers (other than the Representatives) (the "Other
Purchasers") to act as attorney-in-fact for each of the Other Purchasers
pursuant to a current, valid and enforceable power of attorney executed by each
of the Other Purchasers. The power of attorney conveyed by the Other Purchasers
to the Representatives includes the power and authority (expressly, and not by
implication) to execute and deliver this Agreement on behalf of the Other
Purchasers. Upon the execution and delivery of this Agreement by the
Representatives on behalf of the Other Purchasers, this Agreement will
constitute a valid and binding agreement of each Other
Purchaser, enforceable against each Other Purchaser in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
Section 4.2. Absence of Misstatement. To the best knowledge of each
Representative after due inquiry, the representations and warranties of the
Other Purchasers contained in Article III hereof are true and correct in all
respects.
ARTICLE V
SURVIVAL, AMENDMENT AND WAIVER
Section 5.1. Survival. The representations and warranties contained in
this Agreement or any certificate delivered in connection herewith shall survive
the sale of the Securities as contemplated hereby.
Section 5.2. Amendments. This Agreement (including the provisions of
this Section 5.2) may not be amended or modified except by an instrument in
writing signed on behalf of all of the parties affected by such amendment or
modification.
Section 5.3. Extension; Waiver. The parties hereto may (i) extend the
time for performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties of the other parties hereto contained herein or in any document
delivered pursuant hereto, and (iii) waive compliance with any of the agreements
of the other parties hereto or satisfaction of any of the conditions to such
party's obligations contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of a party
hereto to assert any of its rights hereunder shall not constitute a waiver of
such rights.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Notices. All notices, requests, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand, when delivered by courier, three
days after being deposited in the mail (registered or certified mail, postage
prepaid, return receipt requested), or when received by facsimile transmission
upon receipt of a confirmed transmission report, as follows:
If to the Sellers: c/o Special Situations Fund III, L.P.
153 E. 53rd Street, 55th Floor
New York, New York 10022
Tel: (212) 207-5600
Fax: (212) 207-6515
Attention: Austin Marxe
If to the Purchasers: c/o Ron Zuckerman
9B Hahoresh Street
Kfar Shmaryahu, Israel
Any party hereto, by notice given to the other parties hereto in accordance with
this Section 5.1 may change the address or facsimile transmission number to
which such notice or other communications are to be sent to such party.
Section 6.2. Expenses. Each of the parties hereto shall pay its own
expenses incident to this Agreement and the transactions contemplated herein.
Section 6.3. Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New York, without reference to the choice of law principles thereof.
Each of the parties hereto irrevocably submits to the exclusive jurisdiction of
the courts of the State of New York located in New York County and the United
States District Court for the Southern District of New York for the purpose of
any suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
Section 6.4. Assignment; Successors and Assigns; No Third Party Rights.
This Agreement may not be assigned by operation of law or otherwise, and any
attempted assignment shall be null and void. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
successors, permitted assigns and legal representatives. This Agreement shall be
for the sole benefit of the parties to this Agreement and their respective
heirs, successors, permitted assigns and legal representatives and is not
intended, nor shall be construed, to give any Person, other than the parties
hereto and their respective heirs, successors, assigns and legal
representatives, any legal or equitable right, remedy or claim hereunder.
Section 6.5. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original agreement, but all of
which together shall constitute one and the same instrument.
Section 6.6. Titles and Headings. The titles and headings in this
Agreement are for reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
Section 6.7. Entire Agreement. This Agreement constitute the entire
agreement among the parties with respect to the matters covered hereby and
thereby and supersede all previous written, oral or implied understandings among
them with respect to such matters.
Section 6.8. Severability. The invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions hereof. If it
is ever held that any restriction
hereunder is too broad to permit enforcement of such restriction to its fullest
extent, such restriction shall be enforced to the maximum extent permitted by
law.
Section 6.9. Interpretation. Unless otherwise indicated to the contrary
herein by the context or use thereof: (i) the words, "herein," "hereto,"
"hereof" and words of similar import refer to this Agreement as a whole and not
to any particular Section or paragraph hereof; (ii) words importing the
masculine gender shall also include the feminine and neutral genders, and vice
versa; and (iii) words importing the singular shall also include the plural, and
vice versa.
Section 6.10. No Strict Construction. Each of the parties hereto
acknowledge that this Agreement has been prepared jointly by the parties hereto,
and shall not be strictly construed against either party.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
SPECIAL SITUATIONS FUND III, L.P.
By: /s/ Austin Marxe
---------------------------------------
Austin Marxe,
General Partner
SPECIAL SITUATIONS CAYMAN FUND, L.P.
By: /s/ Austin Marxe
---------------------------------------
Austin Marxe,
General Partner
SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.
By: /s/ Austin Marxe
---------------------------------------
Austin Marxe,
General Partner
SPECIAL SITUATIONS TECHNOLOGY FUND II, L.P.
By: /s/ Austin Marxe
---------------------------------------
Austin Marxe,
General Partner
SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.
By: /s/ Austin Marxe
---------------------------------------
Austin Marxe,
General Partner
/s/ Shimon Alon
---------------------------
Shimon Alon
Purchase Price: $633,375.26
Number of Shares: 408,629
Number of Series A Warrants: 441,698
Number of Series B Warrants: 147,232
/s/ Ron Zuckerman
---------------------------
Ron Zuckerman
Purchase Price: $633,375.26
Number of Shares: 408,629
Number of Series A Warrants: 441,698
Number of Series B Warrants: 147,232
/s/ Ron Zuckerman
---------------------------
Eli Perry, by Ron Zuckerman, as Attorney-in-Fact
Purchase Price: $633,375.26
Number of Shares: 408,629
Number of Series A Warrants: 441,698
Number of Series B Warrants: 147,232
GF CAPITAL MANAGEMENT & ADVISORS LLC
By: /s/ Ron Zuckerman
------------------------
Attorney-in-Fact
Purchase Price: $380,025.16
Number of Shares: 245,178
Number of Series A Warrants: 265,018
Number of Series B Warrants: 88,341
/s/ Ron Zuckerman
---------------------------
Peter Luggen, by Ron Zuckerman, as Attorney-in-Fact
Purchase Price: $253,350.10
Number of Shares: 163,452
Number of Series A Warrants: 176,679
Number of Series B Warrants: 58,893
BAROSSA FINANCE LTD.
By: /s/ Ron Zuckerman
------------------------
Attorney-in-Fact
Purchase Price: $633,375.26
Number of Shares: 408,629
Number of Series A Warrants: 441,698
Number of Series B Warrants: 147,232
EXHIBIT 3
ATTUNITY LTD.
STOCKHOLDERS AGREEMENT
This Stockholders Agreement is made on this 23rd day of December 2003
among Shimon Alon, Ron Zuckerman, GF Capital Management & Advisors, LLC, Peter
Luggen, Sharon Kotlicki-Pery, Avishai Kotlicki, Genia Kotlicki and Barrossa
Finance Ltd. (hereinafter collectively referred to as the "Investors" and each
individually referred to as an "Investor").
R E C I T A L S
WHEREAS, the Investors have acquired certain securities of Attunity
Ltd. (the "Company") itemized in Appendix A hereto (the "Securities"); and
WHEREAS each Investor has invested the amount and thereby acquired the
percentage interest in the Securities set forth in Appendix B; and
WHEREAS the Investors wish to promote their mutual interests by
agreeing to certain matters pertaining to their investment, including the
disposition, exercise, conversion and voting of the Securities, representation
on the Board of the Company and other matters affecting their investment;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Investors hereby agree as follows:
1. COVENANTS AND REPRESENTATIONS OF THE PARTIES
(a) LEGENDS. The certificates evidencing the Securities and
all Ordinary Shares of the Company (as defined in Appendix A hereto) issued
pursuant to any exercise or conversion of the Securities will bear the following
legend reflecting the restrictions on the transfer of such securities contained
in this Agreement in addition to those imposed by the federal securities laws:
"The securities evidenced hereby are subject to the terms of a
Stockholders Agreement dated December 23, 2003 among the
Investors identified therein, including certain restrictions
on transfer. A copy of the Stockholders Agreement has been
placed with Steve Kronengold, Esq. and is available upon
request. Any transfer in contravention of the terms of the
Stockholders Agreement shall be null and void."
(b) COVENANT NOT TO ENGAGE IN THE PURCHASE/SALE OF COMPANY
SECURITIES. Each Investor hereby covenants not to engage, directly or
indirectly, in the purchase or sale of Company securities whether individually
or through any third person or entity. This negative
covenant prohibits put and call transactions and any other investment mechanism
that relates to the securities of the Company.
(c) REPRESENTATION AS TO NO ADDITIONAL INVESTMENT INTEREST.
Each Investor hereby represents and warrants the he/it does not own, whether
directly or indirectly, any beneficial interest in the securities of the Company
other than his/its percentage interest in the Securities itemized in Appendix B
hereto.
(d) EXCLUSION OF SECURITIES ISSUED AS COMPENSATION. The
foregoing representations and covenants and the terms of this Agreement as a
whole shall not apply to securities of the Company that are issued or granted to
Messrs. Ron Zuckerman and/or Shimon Alon in consideration of services rendered
to the Company in their capacities as members of the Board of Directors or
otherwise. Such compensation that is excluded from the terms of this Agreement
includes but is not limited to a three-year warrant to purchase 450,000 shares
of the Company at a price of $1.75 per share.
2. AUTHORITY OVER DISPOSITIONS AND VOTING OF SHARES
(a) DISPOSITION OF THE SHARES. The Investors hereby agree that
Messrs. Ron Zuckerman and Shimon Alon shall jointly, but not severally, have
sole discretionary authority over the acquisition, disposition, exercise and/or
conversion of the Securities. Without limiting the foregoing, Messrs. Zuckerman
and Alon shall, acting jointly but not severally, have sole discretionary
authority over the following: (1) the purchase of the Securities and the
execution of all relevant documentation in connection therewith; (2) the sale of
all or a portion of the Securities or any Ordinary Shares issued pursuant to the
exercise or conversion of all or a portion of the Securities; (3) the exercise
of all or a portion of the Series A Warrants and/or Series B Warrants itemized
in Appendix A hereto; (4) the exercise of the option to purchase the Convertible
Debentures itemized in Appendix A hereto and (5) the conversion of Convertible
Debentures into Ordinary Shares. Any sale or exercise or conversion of
Securities, or any Ordinary Shares issued pursuant to the exercise or conversion
of all or a portion of the Securities, in contravention of this Section 2(a)
shall be null and void.
(b) VOTING POWER. The Investors hereby appoint Messrs. Ron
Zuckerman and Shimon Alon, acting jointly but not severally, as their Powers of
Attorney with sole and discretionary power to exercise the voting rights of the
Securities at any general or special meeting of shareholders of the Company or
any other matter that requires the exercise of such voting rights. Messrs.
Zuckerman and Alon may exercise the voting rights in person or by proxy.
(c) APPOINTMENT TO BOARD OF DIRECTORS. The Shares shall be
voted, among other things, to elect Messrs. Zuckerman and Alon to the Board of
Directors of the Company, where they shall dedicate their talents in furtherance
of the best interests of the Company's shareholders.
3. DISTRIBUTION OF PROCEEDS AND ALLOCATION OF EXERCISE PRICE
(a) DISTRIBUTION OF PROCEEDS FROM SALES. Proceeds from the
sale of all or a portion of the Securities or any Ordinary Shares issued
pursuant to the exercise or conversion of all or a portion of the Securities
shall be distributed to the Investors on a pro rata basis corresponding to each
Investor's investment interest itemized in Appendix B hereto.
(b) ALLOCATION OF EXERCISE PRICE. In the event Messrs.
Zuckerman and Alon, acting jointly, exercise the Investors' option to purchase
the Convertible Debentures or exercise all or a portion of the Series A and/or
series B Warrants described in Appendix A, then each Investor shall contribute a
pro rata portion of the exercise price corresponding to his/its investment
interest itemized in Appendix B hereto.
4. TERM AND TERMINATION
(a) TERM. This Agreement shall remain in force for a period of
three (3) years from the date of this Agreement.
(b) TERMINATION. Irrespective of Section 4(a), above, this
Agreement shall terminate immediately upon the occurrence of either of the
following:
(i) The Investors agree in writing to terminate this
Agreement; or
(ii) The sale of all of the Securities and Ordinary
Shares issued pursuant to the exercise or conversion of the Securities that are
the subject of this Agreement.
5. MISCELLANEOUS
(a) ENTIRE AGREEMENT; AMENDMENT. This Agreement and its
Appendices contains the entire agreement and understanding of the Investors
relating to the subject matter hereof and supersedes all prior or
contemporaneous written or oral understandings among them. Any amendment to this
Agreement must be in writing and signed by all of the Investors.
(b) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
Investors.
(c) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. Any dispute
arising out of, relating to or in connection with this Agreement shall be
submitted to the exclusive jurisdiction of the federal courts of the State of
New York.
(d) SEVERABILITY. In the event that any part of this Agreement
shall be held illegal or unenforceable by any court or administrative body of
competent jurisdiction, such determination shall not affect the remaining terms
of this Agreement, which shall remain in full force and effect.
(e) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same Agreement.
IN WITNESS WHEREOF, the Investors hereto have executed this
Stockholders Agreement on this 23rd day of December 2003.
/s/ Shimon Alon /s/ Sharon Kotlicki-Perry
----------------------- -------------------------
Shimon Alon Sharon Kotlicki-Perry
/s/ Ron Zuckerman /s/ Genia Kotlicki
------------------------ -------------------------
Ron Zuckerman Genia Kotlicki
/s/ Gary Fuhrman /s/ Avishai Kotlicki
------------------------- -------------------------
GF Capital Management and Advisors LLc. Avishai Kotlicki
/s/ Peter Luggen
-------------------------
Peter Luggen
/s/ Ryan Rudolph
--------------------------
Barrossa Finance Ltd.
APPENDIX A
SECURITIES ACQUIRED BY THE INVESTORS
1. The Investors have purchased the following securities of the Company
from Special Situations Fund III, L.P., Special Situations Cayman Fund, L.P.,
Special Situations Technology Fund, L.P., Special Situations Technology Fund II,
L.P. and Special Situations Private Equity Fund, L.P. pursuant to a Share
Purchase Agreement dated December 23, 2003:
(i) 2,043,146 Ordinary Shares, nominal value NIS 0.1 per share, of
the Company;
(ii) Series A Warrants (the "Series A Warrants") to purchase an
aggregate of 2,208,488 Ordinary Shares; and
(iii) Series B Warrants (the "Series B Warrants") to purchase an
aggregate of 736,162 Ordinary Shares.
2. In addition, the Investors have acquired an option to purchase
$2,000,000 of convertible debentures (the "Convertible Debentures") from the
Company pursuant to a binding Term Sheet dated December 29, 2003.
APPENDIX B
INVESTOR AMOUNT %
-------- ------ -
SHIMON ALON 633,375.26US$ 20%
RON ZUCKERMAN 633,375.26US$ 20%
GF CAPITAL MANAGEMENT AND ADVISORS LLC. 380,025.16 US$ 12%
PETER LUGGEN 253,350.10US$ 8%
SHARON KOTLICKI-PERY 316,687.63US$ 10%
GENIA KOTLICKI 158,343.815US$ 5%
AVISHAI KOTLICKI 158,343.815US$ 5%
BAROSSA FINANCE LTD. 633,375.26US$ 20%
EXHIBIT 4
TERM SHEET FOR THE OPTION TO PURCHASE $2,000,000 OF
CONVERTIBLE DEBENTURES FROM ATTUNITY LTD.
Date: December 29, 2003.
Company or Attunity: Attunity Ltd., a publicly held Israeli
company traded on NASDAQ.
Purchaser: A group of individuals including Ron
Zuckerman, Shimon Alon and others.
SSF: Special Situations Fund III, L.P. and
Special Situations Private Equity Fund,
L.P. and Special Situations Technology
Fund, L.P. and Special Situations
Technology Fund II, L.P. and Special
Situations Cayman Fund, L.P.
Representation and Warranties: The Purchaser has received from the
Company its 20F for the year 2002 and
the quarterly financial results of 2003.
The Company will provide the Purchaser
with representations and warranties
typically given in transactions of this
kind and covering other matters arising
from Purchaser's due diligence.
The SSF Lawsuit: SSF filed a lawsuit against the Company
for late registration of the shares that
were issued to them by the Company in
accordance with the SSF purchase
agreement. The court of first instance
ruled in favor of SSF and the Company
has recently appealed. The company
recorded in its financial statements a
provision of $800,000, which the Company
in good faith believes and represents as
the accurate provision to be recorded in
accordance with U.S. GAAP and as
certified by the Company's outside
auditor as a result of the SSF Lawsuit.
The Company presented to the Purchaser
the details of the SSF Law Suit and its
current status.
The Lease in the US: The Company has a lease agreement for
offices in Burlington, MA. The company
moved to new offices and notified the
landlord to find an alternative tenant.
The Company has not paid for the lease
and the landlord has filed a lawsuit
against the Company. The Company
recorded a provision of $700,000 in its
financial statements, which the Company
in good faith believes and represents as
the accurate provision to be recorded in
accordance with U.S. GAAP and as
certified by the
Company's outside auditors as a result
of the U.S. lease. The Company is
negotiating a settlement with the
landlord to terminate the lease
agreement.
The Purchase of the SSF
Shares and Warrants: Purchaser has signed an agreement to
purchase from SSF 2,043,146 shares plus
approximately 2,208,489 warrants at an
exercise price of $1.75 plus
approximately 736,162 warrants at an
exercise price of $2.25.
The Option to Purchase Convertible
Debentures and Warrants: Attunity grants Purchaser an option (the
"Option") exercisable within thirty (30)
days from the date of this Term Sheet,
to purchase (the "Purchase") $2,000,000
of convertible debentures from the
Company (the "Debentures") and
three-year warrants to purchase 450,000
Ordinary Shares of Attunity at a price
per share of $1.75 (the "Three-Year
Warrants"). The Option can only be
exercised in full and not in part. The
term of the Debentures will be until the
earlier of (i) the merger of the Company
into another company in which the
Company is not the surviving entity,
(ii) the purchase of all or
substantially all of the shares or
assets of the Company, and (iii) five
(5) years from the date of issuance. The
outstanding principal amount of the
Debentures will accrue interest at the
rate of 5% per annum, payable
semi-annually in cash. Any portion of
the Debentures will be convertible at
any time at the election of the holders
of at least 50% of the principal amount
into the Company's ordinary shares at a
price per share of $1.75. This option is
conditioned upon the closing of the
Purchase of the SSF Shares and Warrants
by Purchaser before December 30, 2003.
The conversion price of the Debentures
will be subject to customary
anti-dilution protections and
adjustments for bonus shares,
recapitalizations and the like. The
conversion price of the Debentures will
be protected by a "ratchet" clause
similar to the ratchet included in
Section 8(f) of the SSF Warrants, except
that this ratchet will not apply to any
transaction with the Purchaser or any
affiliates of the Purchaser.
After the Purchase, Purchaser will be
entitled to appoint two Board members as
long as it holds at least 15% of the
outstanding share capital of Attunity
and one Board member as long as it holds
at least 5% but less than 15% of the
outstanding share capital of Attunity;
however,
Attunity agrees that Ron Zuckerman,
Shimon Alon and Ben Nye will be
appointed as Board members to the Board
of Directors of the Company upon closing
of the Debenture transaction and will
serve as directors until the Company's
2004 annual general meeting of
shareholders. The appointment of Shimon
Alon and Ben Nye as directors to
Attunity is subject to the approval of
Veritas where they have a non- compete
commitment until June 30th, 2004. In the
event that the Purchaser does not
purchase the Debentures but only
purchases the SSF Shares and Warrants,
the Purchaser shall have the same rights
with regard to nomination of a director
as SSF currently has.
Liquidation Preference and
approval of any Senior debt In the event of any liquidation,
dissolution or winding up of the
Company, the Purchaser will be entitled
to receive a liquidation preference
equal to the principal amount of the
Convertible Debentures which have not
been converted into Ordinary Shares
prior to such time ("Preference
Amount"). Consent of the Purchaser shall
be required for any action by the
Company that authorizes, creates,
reclassifies or issues any debt or
equity security having preferences
senior to or parity with the Debentures.
Redemption Any part of the principal amount of the
Debentures which has not been converted
shall be redeemed in cash at maturity.
Registration: All of the Ordinary Shares underlying
the 450,000 warrants and the Debentures
shall be registered not later than 120
days after the closing of the Purchase
and receipt of all required regulatory
approvals.
The SSF Warrants
Acquired by Purchaser: The term of the SSF Warrants purchased
by Purchaser from SSF is until November
2005. Attunity agrees that the term of
the SSF Warrants Term will be extended
by one (1) year. In addition, the `Call
Provision" in Section 18 of the SSF
Warrants will be changed so that it will
be applicable only after January 1,
2005.
The ratchet specified in Section 8(f) of
the SSF warrants acquired by Purchaser
will apply to the Debentures transaction
herein but the exercise price will not
be lower then $2.00 per share. In
addition, the ratchet specified in
Section 8(f) of the SSF warrants
acquired by Purchaser will
apply to any other future transaction
except for transaction with the
Purchaser or any affiliates of the
Purchaser.
Ron Zuckerman, Ben Nye
and Shimon Alon
Services agreement: Subject to the closing of the Purchase,
Ron Zuckerman, Ben Nye and Shimon Alon
will provide to the Company consulting
services in the amount of 105 days per
year accumulatively, for a period of
three years. For these services, Messrs.
Alon, Nye and Zuckerman will receive the
same compensation (in cash and options)
as all non-employee directors of
Attunity.
Board of Directors: The Board of Directors includes: Anat
Segal, Arie Gonen (Chairman), Dani Falk,
Roni Ferber. The Board decided to also
appoint Dr. Dov Biran as a director for
the Company. The appointment of these
directors will be brought for approval
by the shareholders at the next AGM.
Employee Options: The Company intends to issue up to
1,000,000 options to its employees from
an existing pool of stock option,
currently available. In addition, the
Board of Attunity approved a new
1,000,000 stock option plan to be
approved by shareholders in the December
30, 2003 AGM.
Gonen's Employment Agreement: The Audit Committee and Board of
Attunity approved Gonen's appointment as
CEO of the Company in addition to his
position as Chairman of the Board. Gonen
agreed to spend 66% of his time in the
US during 2004. The Audit Committee and
the Board of Attunity approved that as
part of his new appointment as CEO, the
Company will grant Gonen additional
600,000 stock options at $1.75. The
terms of the 600,000 stock options were
approved by the Board of Attunity.
Gonen's other compensation terms
remained substantially unchanged.
Gonen's appointment and changes to
employment agreement (including the
above options) should be approved by the
shareholders at the AGM to be held in
December 30, 2003.
In the event the Company terminates
Gonen' position as CEO while otherwise
continuing his employment with the
Company, such termination shall not
trigger the severance payment,
consultancy and other termination
payment/protective provisions in Gonen's
employment agreement.
Subject to the closing of the Purchase,
in the event the Company wishes to
terminate Gonen's employment agreement
with the Company due to the failure of
the Company to achieve its financial
milestones agreed to from time to time
by Gonen and the Board, the Company
shall have the right to pay Gonen a one
time upfront payment lump-sum of
$250,000 instead of the payments that
Gonen is entitled to as part of the
services component included in Gonen's
employment agreement and Gonen will not
be required to provide the related
services.
Confidentiality: The Purchaser and the Company and any
other person acting on their behalf
shall keep this Term Sheet and related
correspondence in strict confidence, and
shall not issue any public statement or
press release concerning this
transaction without mutual prior written
approval of the substance and form of
any such statement or release subject to
Attunity's obligations to make
disclosure pursuant to applicable law.
Press Release: In the event that Purchaser purchases
the SSF Shares and Warrants and
purchases the Debentures, both parties
will issue one mutually agreed press
release covering the two transactions.
Expenses: At the closing of the Purchase, the
Company will pay the Purchaser $60,000
as reimbursement of costs and expenses
in connection with the Purchase. It is
also agreed that if the shareholders of
Attunity do not approve the Purchase and
all other terms specified herein,
including the changes to the SSF
Warrants, at the closing of the
Purchase, Attunity will reimburse the
Purchaser's reasonable out of pocket
expenses relating to the Purchase in the
amount of $50,000.
Finders Fee Subject to the Closing, the Company
acknowledges that it will be required to
pay a finders fee of $150,000 to a third
party designated by the Purchaser.
Definitive Agreement and
Due Diligence: During a thirty-day period beginning
with the date of execution of this Term
Sheet, the Purchaser will conduct due
diligence on the Company and the
Company's management team will cooperate
with the Purchaser to help expedite the
due diligence process. By no later than
the end of such thirty-day period,
unless extended by mutual agreement of
the parties, Purchaser will notify
Attunity of its decision whether to
exercise the Option. In
the event that the Purchaser exercises
the Option as aforesaid, definitive
agreements will be signed within
fourteen (14) days from the date of such
exercise. Upon exercise of the Option,
this Term Sheet shall serve as a binding
agreement until such definitive
agreements are signed. However, this
Term Sheet is binding on the Company's
behalf as of the date herein.
Shareholders' Approval: The Purchase, the extension of the Term
of the SSF Warrants and the Ron
Zuckerman, Ben Nye and Shimon Alon
Services agreement are conditional upon
the approval of Attunity's shareholders.
Attunity will start a process of
convening a shareholders meeting
immediately after the exercise of the
Option. The funds that Purchaser invests
in the Company under the Purchase will
be transferred at the closing which will
be held as soon as practicable after
approval of the Purchase by Attunity's
shareholders, but in no event later than
seven (7) days from such approval.
Market Stand-off (lock-up) Purchaser, and Arie Gonen shall be bound
by a 180-day market stand-off or lock-up
period. The Company shall use its best
efforts to obtain also the agreement of
Messrs. Biran and Sagie to such market
stand-off. If the Company is unable to
obtain Messrs. Biran and Sagie's
agreement to the market stand-off, then
Purchaser at his option may terminate
this stand-off restriction.
Attunity Board of Directors
Approval This Term Sheet was approved by the
Audit Committee and Board of Directors
of Attunity held on December 28th, 2003
and the Board authorized Arie Gonen to
execute this Term Sheet and all related
documents.
IN WITNESS WHEREOF, the parties hereto have executed this Term Sheet on the date
first written above:
/s/ Arie Gonen /s/ Ron Zuckerman
----------------------------- --------------------------------
ATTUNITY LTD. PURCHASER
By: ARIE GONEN, CHAIRMAN /s/ Shimon Alon
--------------------------------
PURCHASER
By: RON ZUCKERMAN
By: SHIMON ALON
IRREVOCABLE PROXY
The undersigned shareholder of Attunity Ltd., an Isreali company ("Attunity"),
hereby irrevocably appoints Ron Zuckerman and/or Shimon Alon, as the sole and
exclusive attorney-in-fact and proxy of the undersigned, with full power of
substitution and resubstitution, for and in the name of the undersigned, to vote
all the ordinary shares, par value NIS 0.1 per share, of Attunity which the
undersigned would be entitled to vote as fully as the undersigned could if
personally present at a Meeting of Shareholders of Attunity, in favor of a
resolution ratifying the Agreement between Attunity Ltd and Ron Zuckerman and
Shimon Alon which was approved by the Board of Directors of Attunity Ltd. on
December 28, 2003. This Irrevocable Proxy is irrevocable and is coupled with an
interest.
/s/ Arie Gonen
----------------------------
Arie Gonen
IRREVOCABLE PROXY
The undersigned shareholder of Attunity Ltd., an Isreali company ("Attunity"),
hereby irrevocably appoints Ron Zuckerman and/or Shimon Alon, as the sole and
exclusive attorney-in-fact and proxy of the undersigned, with full power of
substitution and resubstitution, for and in the name of the undersigned, to vote
all the ordinary shares, par value NIS 0.1 per share, of Attunity which the
undersigned would be entitled to vote as fully as the undersigned could if
personally present at a Meeting of Shareholders of Attunity, in favor of a
resolution ratifying the Agreement between Attunity Ltd and Ron Zuckerman and
Shimon Alon which was approved by the Board of Directors of Attunity Ltd. on
December 28, 2003. This Irrevocable Proxy is irrevocable and is coupled with an
interest.
/s/ Dov Biran
----------------------------
Dr. Dov Biran
IRREVOCABLE PROXY
The undersigned shareholder of Attunity Ltd., an Isreali company ("Attunity"),
hereby irrevocably appoints Ron Zuckerman and/or Shimon Alon, as the sole and
exclusive attorney-in-fact and proxy of the undersigned, with full power of
substitution and resubstitution, for and in the name of the undersigned, to vote
all the ordinary shares, par value NIS 0.1 per share, of Attunity which the
undersigned would be entitled to vote as fully as the undersigned could if
personally present at a Meeting of Shareholders of Attunity, in favor of a
resolution ratifying the Agreement between Attunity Ltd and Ron Zuckerman and
Shimon Alon which was approved by the Board of Directors of Attunity Ltd. on
December 28, 2003. This Irrevocable Proxy is irrevocable and is coupled with an
interest.
/s/ Ike Sagie
----------------------------
Ike Sagie
Attunity Ltd.
Einstein Building
Tirat Carmel
Dear Sirs:
Without the prior written consent of Attunity Ltd., an Israeli company
(the "COMPANY"), the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any Ordinary Shares, par value NIS
0.1 nominal value per share (the "ORDINARY SHARES"), of the Company (including,
without limitation, Ordinary Shares that may be deemed to be beneficially owned
by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and the Ordinary Shares that may be issued
upon exercise of any option or warrant) or securities convertible into or
exchangeable for Ordinary Shares or substantially similar securities owned by
the undersigned on the date of execution of this Lock-Up Letter Agreement, or
sell or grant options, rights or warrants with respect to any shares of Ordinary
Shares or substantially similar securities (other than the grant of options
pursuant to option plans existing on the date hereof) or (2) enter into any swap
or other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Ordinary
Shares, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Ordinary Shares or other securities, in cash or
otherwise, for a period of 180 days after the date of this Lock-Up Letter
Agreement.
Notwithstanding the foregoing, if the undersigned is an individual, he
or she may transfer any Ordinary Shares or securities convertible into or
exchangeable or exercisable for Ordinary Shares either during his or her
lifetime or upon death by will or intestacy to his or her immediate family or to
a trust if the beneficiaries of such trust are exclusively the undersigned
and/or a member or members of his or her immediate family; provided, however ,
that prior to any such transfer each transferee shall execute an agreement
substantially identical to this agreement and which shall be satisfactory to the
Company, pursuant to which each transferee shall agree to receive and hold such
Ordinary Shares, or securities convertible into or exchangeable or exercisable
for Ordinary Shares, subject to the provisions hereof, and there shall be no
further transfer except in accordance with the provisions hereof. In addition,
if the undersigned is a partnership, the partnership may transfer any Ordinary
Shares or securities convertible into or exchangeable or exercisable for
Ordinary Shares to a partner of such partnership, to a retired partner of such
partnership, or to the estate of any such partner or retired partner, and any
such partner who is an individual may transfer such Ordinary Shares or
securities convertible into or exchangeable or exercisable for Ordinary Shares
by gift, will or intestacy to a member or members of his or her immediate
family; provided, however, that prior to any such transfer each
transferee shall execute an agreement substantially identical to this agreement
and which shall be satisfactory to the Company, pursuant to which each
transferee shall agree to receive and hold such Ordinary Shares or securities
convertible into or exchangeable or exercisable for Ordinary Shares, subject to
the provisions hereof, and there shall be no further transfer except in
accordance with the provisions hereof. For purposes of this paragraph,
"immediate family" shall mean spouse, lineal descendant, father, mother,
brother, sister or domestic partner of the transferor.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
This Lock-Up Letter Agreement will be governed by and construed in
accordance with the laws of the State of Israel.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By: /s/ Arie Gonen
-----------------------------------
Name: Arie Gonen
Date: December 29, 2003
Attunity Ltd.
Einstein Building
Tirat Carmel
Dear Sirs:
Without the prior written consent of Attunity Ltd., an Israeli company
(the "COMPANY"), the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any Ordinary Shares, par value NIS
0.1 nominal value per share (the "ORDINARY SHARES"), of the Company (including,
without limitation, Ordinary Shares that may be deemed to be beneficially owned
by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and the Ordinary Shares that may be issued
upon exercise of any option or warrant) or securities convertible into or
exchangeable for Ordinary Shares or substantially similar securities owned by
the undersigned on the date of execution of this Lock-Up Letter Agreement, or
sell or grant options, rights or warrants with respect to any shares of Ordinary
Shares or substantially similar securities (other than the grant of options
pursuant to option plans existing on the date hereof) or (2) enter into any swap
or other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Ordinary
Shares, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Ordinary Shares or other securities, in cash or
otherwise, for a period of 180 days after the date of this Lock-Up Letter
Agreement.
Notwithstanding the foregoing, if the undersigned is an individual, he
or she may transfer any Ordinary Shares or securities convertible into or
exchangeable or exercisable for Ordinary Shares either during his or her
lifetime or upon death by will or intestacy to his or her immediate family or to
a trust if the beneficiaries of such trust are exclusively the undersigned
and/or a member or members of his or her immediate family; provided, however ,
that prior to any such transfer each transferee shall execute an agreement
substantially identical to this agreement and which shall be satisfactory to the
Company, pursuant to which each transferee shall agree to receive and hold such
Ordinary Shares, or securities convertible into or exchangeable or exercisable
for Ordinary Shares, subject to the provisions hereof, and there shall be no
further transfer except in accordance with the provisions hereof. In addition,
if the undersigned is a partnership, the partnership may transfer any Ordinary
Shares or securities convertible into or exchangeable or exercisable for
Ordinary Shares to a partner of such partnership, to a retired partner of such
partnership, or to the estate of any such partner or retired partner, and any
such partner who is an individual may transfer such Ordinary Shares or
securities convertible into or exchangeable or exercisable for Ordinary Shares
by gift, will or intestacy to a member or members of his or her immediate
family; provided, however, that prior to any such transfer each transferee shall
execute an agreement substantially identical to this agreement and which shall
be satisfactory to the Company, pursuant to which each transferee shall agree to
receive and hold such Ordinary Shares or securities convertible into or
exchangeable or exercisable for Ordinary Shares, subject to the provisions
hereof, and there shall be no further transfer except in accordance with the
provisions hereof. For purposes of this paragraph, "immediate family" shall mean
spouse, lineal descendant, father, mother, brother, sister or domestic partner
of the transferor.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
This Lock-Up Letter Agreement will be governed by and construed in
accordance with the laws of the State of Israel.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By: /s/ Dov Biran
-----------------------------------
Name: Dov Biran
Date: December 29, 2003
Attunity Ltd.
Einstein Building
Tirat Carmel
Dear Sirs:
Without the prior written consent of Attunity Ltd., an Israeli company
(the "COMPANY"), the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any Ordinary Shares, par value NIS
0.1 nominal value per share (the "ORDINARY SHARES"), of the Company (including,
without limitation, Ordinary Shares that may be deemed to be beneficially owned
by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and the Ordinary Shares that may be issued
upon exercise of any option or warrant) or securities convertible into or
exchangeable for Ordinary Shares or substantially similar securities owned by
the undersigned on the date of execution of this Lock-Up Letter Agreement, or
sell or grant options, rights or warrants with respect to any shares of Ordinary
Shares or substantially similar securities (other than the grant of options
pursuant to option plans existing on the date hereof) or (2) enter into any swap
or other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Ordinary
Shares, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Ordinary Shares or other securities, in cash or
otherwise, for a period of 180 days after the date of this Lock-Up Letter
Agreement.
Notwithstanding the foregoing, if the undersigned is an individual, he
or she may transfer any Ordinary Shares or securities convertible into or
exchangeable or exercisable for Ordinary Shares either during his or her
lifetime or upon death by will or intestacy to his or her immediate family or to
a trust if the beneficiaries of such trust are exclusively the undersigned
and/or a member or members of his or her immediate family; provided, however ,
that prior to any such transfer each transferee shall execute an agreement
substantially identical to this agreement and which shall be satisfactory to the
Company, pursuant to which each transferee shall agree to receive and hold such
Ordinary Shares, or securities convertible into or exchangeable or exercisable
for Ordinary Shares, subject to the provisions hereof, and there shall be no
further transfer except in accordance with the provisions hereof. In addition,
if the undersigned is a partnership, the partnership may transfer any Ordinary
Shares or securities convertible into or exchangeable or exercisable for
Ordinary Shares to a partner of such partnership, to a retired partner of such
partnership, or to the estate of any such partner or retired partner, and any
such partner who is an individual may transfer such Ordinary Shares or
securities convertible into or exchangeable or exercisable for Ordinary Shares
by gift, will or intestacy to a member or members of his or her immediate
family; provided, however, that prior to any such transfer each transferee shall
execute an agreement substantially identical to this agreement and which shall
be satisfactory to the Company, pursuant to which each transferee shall agree to
receive and hold such Ordinary Shares or securities convertible into or
exchangeable or exercisable for Ordinary Shares, subject to the provisions
hereof, and there shall be no further transfer except in accordance with the
provisions hereof. For purposes of this paragraph, "immediate family" shall mean
spouse, lineal descendant, father, mother, brother, sister or domestic partner
of the transferor.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
This Lock-Up Letter Agreement will be governed by and construed in
accordance with the laws of the State of Israel.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By: /s/ Ike Sagie
-----------------------------------
Name: Ike Sagie
Date: December 29, 2003